How long can mobile operators institute data usage caps?

How long can mobile operators institute caps on data usage? The question is becoming increasingly relevant as U.S. operators embark on selling netbooks and notebooks bundled with mobile broadband access plans, and it is already hitting AT&T Mobility in the form of a class-action lawsuit.

Billie Parks filed suit on behalf of herself and others against AT&T Mobility and RadioShack [1] after she purchased a $100 netbook at a RadioShack bundled with a two-year data contract from AT&T. Her first bill was more than $5,000. The lawsuit stated that "neither plaintiff nor other consumers were informed, nor could they have reasonable discerned from the paper work that wireless Internet usage exceeding 5GB per month would result in astronomical charges running into the thousands of dollars."

The lawsuit highlights the conundrum that mobile operators are going to face sooner or later: Customers are wanting to use their mobile Internet connections the same way they use their wired ones--despite the fact that operators say they aren't positioning their services this way. Operators have finite resources, and they are playing a balancing act between voice and data traffic. So they can't offer a truly unlimited data plan. Customers, operators reason, are supposed to value the fact that they can use their services on the go, hence agreeing to pay a premium and abide by rules that ban bandwidth hogs such as peer-to-peer file sharing and VoIP calling.

Since operators can never offer a truly unlimited mobile broadband service, they need to come up with more creative ways than just charging customers more or sending termination letters if they go over a the 5GB threshold. That only angers consumers.

Prepaid broadband plans might be one option, and then there are other options from scores of bandwidth management solutions that offer more finesse. Vodafone Hungary has deployed a new bandwidth management system for its mobile broadband services [2] that uses a solution from Camiant that dials back a subscriber's usage to 2G levels during times of heavy congestion. At other times, users can exceed their usage caps at full 3G bandwidth. This "soft cap" gives Vodafone the ability to manage high usage periods while offering an upgrade path for customers who want to pay for a higher level of service to guarantee 3G speeds during peak traffic hours.

To me, these types of solutions are a must as the fight for the mobile broadband customer becomes more intense. What happens when one aggressive operator takes the lead to embrace mobile VoIP? As consumers begin to view mobile broadband as a more integral part of their communications lives, operators simply can't put limits in fine print anymore. --Lynnette [3]